Riding out the lows

20 Mar, 2017 01:33 PM
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Representatives: Dairy Australia directors Jeff Odgers and James Mann said DA was helping farmers better understand their production costs during the current industry slump. Picture: Rob Gunstone
In the past eight to 10 years, there has been much increased volatility in markets ...
Representatives: Dairy Australia directors Jeff Odgers and James Mann said DA was helping farmers better understand their production costs during the current industry slump. Picture: Rob Gunstone

The cycle between high and low global dairy prices has got quicker in recent years and dairy farmers need to set up their businesses to manage it, Dairy Australia (DA) farmer director Jeff Odgers says.

Speaking after a meeting in Warrnambool between DA and industry service providers last week, Mr Odgers said the cyclical periods during which global dairy prices had gone from highs to lows had reduced in recent times from seven years to about four years.

“There are lower troughs and higher peaks,” Mr Odgers said.

“In the past eight to 10 years, there has been much increased volatility in markets and it’s not going to go away."

Mr Odgers said a positive to come out of the tough times in the dairy industry in past 12 months had been an increased focus by dairyfarmers on their costs of production.

Dairyfarmers had to give more attention to their costs and profit margins rather than look at increasing their milk production, he said.

Another DA farmer director James Mann, of Mount Gambier, said DA and its south-west arm, WestVic Dairy, had provided programs during the past tough 12 months to help farmers understand their production costs.

DA managing director Ian Halliday said more than 200 dairy farmers in western Victoria had taken part in DA’s Taking Stock program that helped them better understand their business.

Mr Halliday said DA had received great feedback from participants about the relevance of the Taking Stock program.

On other matters, Mr Mann said the drop in farmgate milk prices and national milk production in the past 12 months had cut DA’s revenue by 15 per cent. DA is funded by levies paid by dairyfarmers.

Mr Mann said the cut in revenue had meant DA had to reprioritise its activities and had reduced its marketing in the media of the dairy industry.

It had also tightened its overheads and wound down Dairy Innovation Australia Ltd, a collaboration between DA and dairy processors that aimed to develop efficiencies and innovation in dairy manufacturing.

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